The shares of fast food company Jack in the Box (JACK) are rallying after the company announced plans at its investor day yesterday to refranchise more of its restaurants. A number of research firms reacted positively to the news, with Robert W. Baird upgrading the shares and Oppenheimer and Cowen increasing their price targets on the stock.

WHAT'S NEW: Robert W. Baird analyst David Tarantino upgraded Jack in the Box to Outperform from Market Perform. The company's plan to franchise up to 95% of its restaurants by fiscal 2018, versus 90%+ previously, could boost its earnings per share by nearly $1, Tarantino believes. The company's altered business model should also produce "consistent operating results, higher return on invested capital, and healthy returns of capital to shareholders," the analyst stated. Tarantino raised his price target on the name to $95 from $80. Similarly, Oppenheimer's Brian Bittner believes that the company's franchising initiatives will boost its profits more than investors anticipate. Additionally, the company's share gains have recently accelerated, and its one year comp sales comparisons are easing, making its same-store sales outlook superior to its peers, the analyst stated. The analyst raised his price target on the stock to $91 from $86 and kept an Outperform rating on the shares. Jack in the Box's cost reductions and margin gains caused Cowen's Andrew Charles to significantly raise his estimates for the company. Moreover, the proceeds from the company's refranchsing plans exceeded expectations, and its target of mid-teens percentage growth in operating earnings per share from 2018-2020 is "impressive," Charles believes. He increased his price target on the stock to $94 from $86 and kept an Outperform rating on the shares.

PRICE ACTION: In early trading, Jack in the Box jumped 4.8% to $82.85 per share.